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Investor bullishness witnesses record quarter

Staff reporter  |  26 Feb 2013Text size  Decrease  Increase  |  

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This article was originally published by InvestorDaily, a Sterling publication.

 

Investor bullishness has reached a record quarterly gain, indicating that strong market results are likely to continue despite the looming federal election.

The latest GPS-Melbourne Institute Shareholder Index increased by 12.7 per cent in February, which is the largest quarterly rise since August 2009 and the second sharpest rise in the index's history.

"The shareholder confidence index is a leading indicator of where share prices are heading," Melbourne Institute professor Guay Lim said.

"That means the latest result is less of a reflection of what has occurred during the last two months and more an indicator of what is to come."

The index has risen at an average of 3 per cent every quarter since August 2011 and the result was recorded despite the occurrence of a federal election this year.

The index found that 66.3 per cent of survey participants believed the election would not change domestic volatility and 86.7 per cent said their interest in investing would not be affected.

"These views are somewhat surprising because investors are normally reticent in election years, thanks to the inherent uncertainties that elections bring," GPS director Andrew Thain said.

"For now, at least, investors see the chance to make gains after a long period of flat or negative returns."

The survey also found that survey participants expected higher returns from their equity investments, with overall shareholder confidence rising by 41.5 per cent in the index.